I write on fiscal and economic policy issues at all levels of government. Areas of particular interest for me include tax policy, entitlements and public employee compensation. In addition to Forbes, I contribute periodically to National Review Online, City Journal and the New York Daily News. Previously, I was a commercial real estate finance analyst at Wells Fargo. I hold a Bachelor's Degree from Harvard College.

Why Didn't Apple Sue Mike Daisey?

Mike Daisey’s lies about Foxconn’s Chinese factories emerged because Rob Schmitz, a Public Radio reporter based in China, thought Daisey’s account sounded fishy and investigated for himself. Since Schmitz’s account—based mostly on discussions with Daisey’s interpreter—and This American Life’s retraction of an episode contaning an abridged version of Daisey’s monologue on the subject, several other China-based Westerners haveexpressed that they, too, had thought Daisey’s story sounded fishy.

If many western reporters thought Daisey was making things up, and Schmitz was able to prove it, doesn’t it follow that Apple must have known all along that Daisey was lying? For example, Apple should have known that there were no hexane-related injuries at any of Foxconn’s Shenzhen facilities, contrary to Daisey’s claim to have met injured workers there whose “hands shake uncontrollably.” Given the knowledge that Daisey was damaging their brand with lies, why hasn’t Apple sued him for slander?

I suppose the answer is that Apple felt a slander suit would not serve its interests. Litigating Daisey’s monologue would have brought out the same revelations we’ve seen this week—some of its content is true, some is made up, and some describes real events that Daisey heard about but did not witness. Such a mixed bag of findings would not have quieted objections to Apple’s business practices in China, and would have raised the profile of the complaints.

Unfortunately, this calculus reflects the fact that the public is likely to mis-analyze the merits of Apple’s operations in China. There is a temptation to say that many of Daisey’s lies were inconsequential: whether in Shenzhen or Suzhou, there were Foxconn workers who suffered hexane poisioning. (Correction: the Suzhou incident involved Wintek, another Apple contractor, not Foxconn.) This is essentially Daisey’s defense—that he took real stories and made them more vivid by telling them as though he had seen them in person.

But a key reason Daisey’s account was effective is that it depicted a density of horror at Foxconn’s Chinese plants. If Daisey could visit just one city for just six days and come out with as much vivid material as he did, imagine what is going on at Foxconn’s facilities all over the country. Admitting that many of the conditions he discussed were not uniform and not necessarily common—and not, so far as he could tell, present in Shenzhen—would have made his critique much less damning.

A lot of the anger at Daisey over the last couple of days has focused on how he has wronged the listeners who believed his story and the outlets that agreed to broadcast it, and those groups certainly should feel wronged. But we’re almost glossing over Daisey’s primary victims: Apple and Foxconn, the companies he has been maliciously lying about, and their shareholders. Slander is still wrong even when the entity you’re lying about is a huge and wildly successful company, and it’s not wrong principally because you might embarrass the network that broadcasts your slander.

I think a slander suit against Daisey has probably gotten even less likely after this week’s revelations. Daisey can’t have much money to pay damages with, and the other valid reason to sue for slander—to get someone to stop lying about you—is now moot. But I think that’s sort of a shame, as I would enjoy watching Daisey defend a slander suit.

As for the merits of Foxconn’s operations in China, I think Matt Yglesias has the right take. You have to look at this from an opportunity cost perspective. If the conditions at Foxconn plants are bad in various ways, and yet Chinese people are lining up out the door for jobs there, what that tells you is that their other options are worse. China, like many countries, is much poorer than the United States, and so many things that are improvements by Chinese standards will look terrible from our perspective.

The best way to narrow that gap is continued industrialization and economic development in China—a process that is hindered if we shame people out of buying Chinese products. Meanwhile, Americans should concern themselves with the plight of poor people around the world, but not especially with the plight of poor people around the world who happen to make products for the U.S. market.

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A comedian using his job to pursue a misguided strategy in furthering an overzealous and just as misguided world view. It is right of Apple to not pursue any litigation.

Most Americans conveniently forget that America once too used child-labor and had no labor unions or any form of labor protection. When the country was still expanding to the West, it was the strong survived and the weak perished. Not that any of these was “right” using 20-20 hindsight but it was the reality of that moment in history.

Until a society has developed sufficiently to handle minimum wage, union, labor protection and workplace safety, some in the population must be the pioneers. It is through their sacrifices that the rest of society begins to wake up to agitate for change. China is going through the same growing pain. It does not need an American comic’s misguided sacrifice.

To put this issue into proper perspective, one cannot simply convert RMB into USD and call the pay absurdly low. One has to understand the cost of living and the standard of wages in China vs. US. Just like the same person working the same job in the San Francisco Bay Area will get different pay for the same identical job in Kansas or Edmond, OK. Different cost of living in different regions impact our pay scale.

In China, the cost of foods for the average person is proportional to the salary they receive. One can safely argue that the workers at Foxconn are receiving a reasonable working wage based on the pay scale for that type of work in China. Many of these workers save up their wages for several year and return to their villages or cities to start their own business. It is a springboard towards something better. Few are going to say at FOxconn like US Auto workers working their entire life for a single corp.

Naive and sheltered Americans ought to learn more about global economy and world trade before jumping on these misguided feel-good causes.

Those Chinese workers are doing fine, it is our veteran returning who cannot get jobs and who may have to live in the streets that need our help. INstead of focusing on Foxconn and the imaginary plight of the CHinese workers, let us look honestly at the real needs of our own American citizens.

This younger generation needs to borrow a motto from the older activists: Act locally, think globally.

I was expecting such an essay, though I had no idea what the ‘take’ would be.

I recall seeing a gag board game in a lawyer’s office, titled “The Litigation Game”, authored by Doolittle and Waite.

Apple could have simply started a lawsuit, and asked for suspension of Daisey’s activities. Same as litigating a non-compete….let’s get the offending business suspended, and we can then drag on the litigation…never to get a penalty, but to get the most desired effect “make them stop”.

And Apple may have considered the Super PAC tactic of letting someone else fight its battles, someone else say the nasty things about an opponent. Plenty of fervent Apple fans may have been willing to investigate Daisey’s assertions.

Excuse me but the “hexane poisoning” didn’t take place at Foxconn but at another subcontractor’s facilities. Further, Mike Daisey is a hack, sensationalist, opportunist and a profiteer. Your assertion that he doesn’t have much money is based on what? Funny how articles never mention the fact that tickets to his one man show are $75 and $85 EACH!It appears he is the one exploiting Chinese workers.

I corrected the post to note that was a Wintek facility. On Daisey’s wealth, I don’t know how much money he’s made from his shows. Theatrical productions have a lot of expenses. Let’s say it’s possible that he’s worth a few million dollars. That’s still not enough money to merit Apple suing him for the purpose of recovering cash. The point of a lawsuit would have been to discredit and/or silence Daisey, and that is now moot.

I believe workers there have a choice to move out of Foxconn housing if they don’t like sharing the room. I believe the housing there is not cheap around Foxconn factories. — none of press talk about this issue. Living outside could be very expensive + commute. If you are in China walking 10 blocks a lot faster then taking taxi in commute hours.

Apple does not need legal team get involve … just let the press and some short investors handle it.

Just economic and industrial development is not enough. There needs to be a better system of wealth distribution in China. And while communism is one problem that stifles that, it still has some potential in the intermediate term for such distribution. Longer term will sort itself out if you are an optimist :-).

Injunctions to prevent publication are done in a hurry. But suing for damages, what’s the rush?

And in this case is would be reasonable to sue for actual damages of, say, $55M based on 0.01% of Apple’s market capitalisation. It would be hard to claim that falsified story of this nature didn’t do that level of damage? Maybe far more.